Oil rises as Iran threat to widen war dims hopes of Strait of Hormuz deal
Brent crude futures rose more than 3% to above $106 a barrel before paring some gains as traders assessed higher oil flows from the region. Brent for November settlement was up 2% at $105.09 a barrel at 8:46 a.m. in New York, while West Texas Intermediate gained 1.7% to $93.71.
- Sep 24, 2026,
- Updated Sep 24, 2026 7:39 PM IST
Oil prices climbed on Thursday after Iran threatened to broaden the conflict in the Middle East, raising concerns over further disruptions to crude supplies and weakening hopes of an agreement that could reopen the Strait of Hormuz, Bloomberg News reported.
Brent crude futures rose more than 3% to above $106 a barrel before paring some gains as traders assessed higher oil flows from the region. Brent for November settlement was up 2% at $105.09 a barrel at 8:46 a.m. in New York, while West Texas Intermediate gained 1.7% to $93.71.
“This is a market with very little shock absorbers left, so any credible headline pointing to another potential physical disruption, or escalation, has a disproportionately outsized impact on prices,” said Emily Ashford, head of energy research at Standard Chartered.
Iran threatens wider escalation
The latest move followed comments by a senior Iranian military official, reported by Iran’s Fars news agency, that Tehran could broaden the conflict to the Indian Ocean if attacked.
The remarks have further weakened optimism surrounding a meeting between Iranian and US officials on the sidelines of the UN General Assembly earlier this week. US President Donald Trump described the discussions as “very good,” while Iranian officials played down signs of diplomatic progress.
MUST READ: War could reach Indian Ocean, perhaps beyond, if US continues attacks, says Iran
Iran has repeatedly threatened to escalate attacks against the US in response to further strikes, including by deploying new weapons and targeting additional locations. The potential scope of any escalation into the Indian Ocean remains unclear.
Iran targeted a US-UK military base in the Indian Ocean in March, although the facility was not damaged, Bloomberg reported at the time. Tehran could also intensify attacks against US naval assets outside the Persian Gulf.
Hormuz remains central to oil markets
Iranian President Masoud Pezeshkian said at the UN that Tehran was prepared to resume talks aimed at ending the nearly seven-month conflict. However, he said Iran would not allow freedom of navigation through the Strait of Hormuz while US sanctions and a blockade remain in place.
Crude prices have risen more than 70% this year as the US-Iran war and fallout from the Russia-Ukraine conflict have reduced supplies and damaged infrastructure.
Persian Gulf producers have nevertheless continued shipping crude through Hormuz, with some tankers operating with their transponders switched off, helping limit the supply shock.
Saudi Arabia’s crude shipments in September rose to their highest level since the conflict began. The kingdom has increased exports through Hormuz after attacks disrupted an East-West pipeline to the Red Sea, an important alternative route. Saudi Arabia is also working to restore the pipeline.
ALSO READ: From Gulf to US: How the Iran war is redrawing India’s LPG import map
Fuel markets face additional pressure
The impact has been particularly severe in fuel markets, adding to pressure on consumers and complicating inflation management for central banks.
US retail diesel prices have reached record levels, prompting some lawmakers to call for restrictions on exports. Trump said earlier this week that he had encouraged advisers to support a ban.
Energy Secretary Chris Wright has also been reported to have told oil industry executives to prepare for possible restrictions. However, no final decision has been taken, with senior Trump aides divided and oil executives warning against such measures.
US diesel futures have eased in recent sessions, while European prices have risen amid concerns over reduced American supplies.
DO READ: 'Kharg Island being blown to...': Strait of Hormuz tensions surge as Trump threatens Iran
Oil prices climbed on Thursday after Iran threatened to broaden the conflict in the Middle East, raising concerns over further disruptions to crude supplies and weakening hopes of an agreement that could reopen the Strait of Hormuz, Bloomberg News reported.
Brent crude futures rose more than 3% to above $106 a barrel before paring some gains as traders assessed higher oil flows from the region. Brent for November settlement was up 2% at $105.09 a barrel at 8:46 a.m. in New York, while West Texas Intermediate gained 1.7% to $93.71.
“This is a market with very little shock absorbers left, so any credible headline pointing to another potential physical disruption, or escalation, has a disproportionately outsized impact on prices,” said Emily Ashford, head of energy research at Standard Chartered.
Iran threatens wider escalation
The latest move followed comments by a senior Iranian military official, reported by Iran’s Fars news agency, that Tehran could broaden the conflict to the Indian Ocean if attacked.
The remarks have further weakened optimism surrounding a meeting between Iranian and US officials on the sidelines of the UN General Assembly earlier this week. US President Donald Trump described the discussions as “very good,” while Iranian officials played down signs of diplomatic progress.
MUST READ: War could reach Indian Ocean, perhaps beyond, if US continues attacks, says Iran
Iran has repeatedly threatened to escalate attacks against the US in response to further strikes, including by deploying new weapons and targeting additional locations. The potential scope of any escalation into the Indian Ocean remains unclear.
Iran targeted a US-UK military base in the Indian Ocean in March, although the facility was not damaged, Bloomberg reported at the time. Tehran could also intensify attacks against US naval assets outside the Persian Gulf.
Hormuz remains central to oil markets
Iranian President Masoud Pezeshkian said at the UN that Tehran was prepared to resume talks aimed at ending the nearly seven-month conflict. However, he said Iran would not allow freedom of navigation through the Strait of Hormuz while US sanctions and a blockade remain in place.
Crude prices have risen more than 70% this year as the US-Iran war and fallout from the Russia-Ukraine conflict have reduced supplies and damaged infrastructure.
Persian Gulf producers have nevertheless continued shipping crude through Hormuz, with some tankers operating with their transponders switched off, helping limit the supply shock.
Saudi Arabia’s crude shipments in September rose to their highest level since the conflict began. The kingdom has increased exports through Hormuz after attacks disrupted an East-West pipeline to the Red Sea, an important alternative route. Saudi Arabia is also working to restore the pipeline.
ALSO READ: From Gulf to US: How the Iran war is redrawing India’s LPG import map
Fuel markets face additional pressure
The impact has been particularly severe in fuel markets, adding to pressure on consumers and complicating inflation management for central banks.
US retail diesel prices have reached record levels, prompting some lawmakers to call for restrictions on exports. Trump said earlier this week that he had encouraged advisers to support a ban.
Energy Secretary Chris Wright has also been reported to have told oil industry executives to prepare for possible restrictions. However, no final decision has been taken, with senior Trump aides divided and oil executives warning against such measures.
US diesel futures have eased in recent sessions, while European prices have risen amid concerns over reduced American supplies.
DO READ: 'Kharg Island being blown to...': Strait of Hormuz tensions surge as Trump threatens Iran